3 Years After Hurricane Michael – Mexico Beach Real Estate Market Report – 2021

10/10/21 marked the 3-year anniversary of Hurricane Michael devastating Mexico Beach and the surrounding areas. It’s been a busy 3 years, and our real estate market got caught up in the frenzy seen in many parts of the country in 2021. After going up in the 3-5% per year seen since the market started rebounding in 2012-2013, we’ve witnessed much larger gains in 2021 with an average increase in value closer to 20%-30%. Specific, harder to find properties have seen larger increases as the inventory has been at extremely low numbers with many properties seeing multiple offers and bidding wars. This year has been unlike anything seen in the market since 2003-2005. I’ll get to more details on the real estate market later in this report but will first focus on how Mexico Beach and the surrounding areas are doing overall. I’m going to share some of the answers to topics I’m most commonly asked and also share some insight from talking with my friend, Mayor Al Cathey. I appreciate his time and understanding of what’s going on in Mexico Beach. I hear so many rumors about Mexico Beach that it’s nice to have someone that knows what’s actually going on. Our conversation is paraphrased below in italics.

I first asked Mr. Al about our financial status as I hear many people worried about rumors that the city is in bad financial shape. While Mexico Beach was hit the hardest by Michael, we were one of the only cities around that didn’t go into private debt over Michael. We’re in very solid financial shape. We don’t owe a dollar to anyone at this time related to Michael, and the city council actually recently voted to lower the millage rate! We’ve received $80 million from FEMA with another $20 million obligated. Approximately 6 months ago Governor Desantis contributed to a local match program which helped with the city’s FEMA obligation. This was a huge help. Most water lines, sewer lines/lift stations are new and in better shape than pre storm. Roads are still being paved, but overall are in good shape. Phase 2 of canal dredging($7 million) should start in about a month. Sunset Park which is next to El Governor, the pavilion at the end of Canal Pkwy, and new bathrooms at the boat ramp should be open by Spring of 2022. The beach itself is in great shape and looks better than ever. 

There are 3 main projects that haven’t reached the stage yet where the money is obligated; the pier, the fire/police/civic center, and the jetties at the mouth of the canal. We’ve made a lot of progress on the pier and think we’ll have a very nice concrete pier, but that one is still in the environmental stage of the process. Mr. Al feels certain that these projects will be funded; but everything just moves slowly with the Federal Government. Zach’s estimate from everything he’s heard about the pier is that it will start in about 2 years and be a larger and better concrete version of what was here before. There are new grants and funds constantly evolving, and the city is active in taking advantage of those programs. City Council knows the businesses destroyed need more time to rebuild and voted this month to extend the grandfather timeline for commercial structures destroyed by Michael, and those can now rebuild in their original footprint through October of 2023. (Very important for Gulf Foods, Toucan’s, and others that couldn’t realistically rebuild without this being extended)

The St. Joe Company remains a good neighbor and have donated 25 acres off of Joe Road/15th Street for the city to have a municipal area that will include the fire/police/civic center area once funded. They also donated 3 more acres near the boat ramp that will be used for additional parking, and the city obtained a separate CDBG grant to add a 3rd boat launch lane.  The St. Joe Company is currently building a 32 lot subdivision on the West end of town past the boat launch. They do still plan to build apartments as well in a joint venture with Home Corp and is currently on hold. St. Joe does plan to have a modest commercial area near the boat ramp at some point. Any development on the south side of 98 is years away in St. Joe’s most recent plans and not in any kind of active permitting or development plan.

I appreciate Mr. Al’s time and feel we’re in even better shape than I realized after our conversation. I’d like to thank the city council and staff for being very responsible and doing a great job navigating an extremely challenging situation. A small town of 1,200 residents that was almost completely destroyed and operating on about a $4 million/year budget pre-storm has accomplished quite a monumental task. Many skeptics thought the city couldn’t survive Michael financially and would have to incorporate with Bay County and default to their zoning laws that would allow high rises etc. I don’t think this was ever realistic, but this clearly shouldn’t be a concern any longer. Below are some of the other common questions I am asked and wanted to share my thoughts.

Is everything rebuilt and open? Not at all. The residential rebuild has gone much faster than the commercial rebuilding. I hear often how nice all the new homes are looking, and it’s definitely a big upgrade as many destroyed cinder block beach houses built 50-70 years ago are now much larger brand-new properties. We only have a small temporary grocery store and the property where Gulf Foods was located was recently put on the market for $3,000,000. None of the completely destroyed restaurants have rebuilt, and there isn’t a motel room ready yet for occupancy. We did finally get a gas station this year, and the renovated Mango Marley’s restaurant is open. Surprisingly to me, the lack of commercial options hasn’t slowed down the residential market at all at this point. There is a light at the end of the tunnel with our motels as The El Governor hopes to complete it’s remodel in 2022, and the brand new Driftwood and Gulf View motel also hope to open in 2022. Toucan’s Restaurant is hoping to start construction by Spring of 2022 by the same owners that owned pre-Michael. There were concerns after Michael that Mexico Beach zoning would change and it would become over commercialized. Good or bad, we’ve so far seen the opposite and will have a lower ratio of commercial businesses to homes than we did pre-Michael for the foreseeable future. I don’t see this changing inside “Old Mexico Beach” as it’s complicated and expensive to meet commercial building requirements on our small commercial lots with limited availability.

Mexico Beach could see growth and commercial businesses on this 87 acre tract I sold for the previous owners this June. The 87 acre owners plan to have about 100 canal front lots to sell along with a nice size commercial area on the land behind the Ace/MB Shopping center. This is according to their last presentation to the city council, and this project is still in the permitting phases.   The St. Joe Company owns a significant amount of undeveloped land to the West of Mexico Beach and bordering Sugar Sands development which borders Tyndall Air Force Base. Sugar Sands is a beachside 64 lot subdivision outside of Mexico Beach where most lots were originally sold by the developers in 2018 and 2019. There are currently 4 homes under construction and a completed pool and pool house. These developers own additional land across Hwy 98 from Sugar Sands and previously sold a small portion that is under construction to be an Inland Sunstop gas station. Tyndall Air Force Base whose property starts next to Sugar Sands on the other side is in the early stages of a $5 billion dollar rebuild that Air Force is touting as the base of the future. I think Tyndall will be a bigger and bigger positive factor for the real estate market for years to come. 

How are Gulf County and Port St. Joe doing? These areas didn’t get wiped out as bad as Mexico Beach and have definitely grown in residential and commercial growth. Port St. Joe is thriving and has become an acceptable option about 10 miles away for restaurants and shopping for many people that have recently bought in Mexico Beach. Our great office manager, Kristy Lee, says there are more restaurants and businesses open than anytime in the approximately 40 years she’s lived here. We’re also seeing growth in the Simmons Bayou area with a new restaurant, and a new hotel is under construction by the owner’s of Black’s Island. This is the largest construction project in the area in the last 15 years. I am on the Gulf County Planning and Zoning Board and see more and more people wanting to be a part of the area.  D R Horton is selling homes as fast as they can build them in WindMark Beach that is between Port St. Joe and Mexico Beach. The Town Center of WindMark is bustling compared to past years with a new bar/store open recently and a pizza restaurant set to open soon. St. Joe Company owns WindMark and has been rapidly developing new phases and selling lots to Horton, who has hit a price point that’s been a lot of bang for the buck with a beach house. Truland homes has focused more in Port St. Joe, and those two builders are significantly larger and more production type builders that can hit much lower price points than our custom builders. Truland has built 79 homes with lots acquired to build another 100 plus homes and Horton has closed out 158 homes with plans for at least another 200 homes in WindMark. These two groups have been selling homes in the $350k-$550K range and have seen tremendous success due to price points in my opinion. A new development called Arrazo, which is unrelated to Truland or Horton, is planning to build 84 homes/duplexes in a neighborhood they have built in Port St. Joe. Here is a link to show the homes currently for sale with these three groups. Our agents can help you buy homes from all of of these companies. 

How much does it cost to build a beach house? I hate this question as it’s kind of like asking how much a car costs. Are we talking a used Kia or new Mercedes? The short answer my builder friends say to give is that a custom home is starting around $250/sq ft. Horton and Truland build their plans on their lots and are totally different than an individual buying a lot and building a home. There are at least 10 custom home building companies with great reputations. These are much smaller operations at the mercy of labor shortages and high material prices. The custom builders remain booked with some quoting they are 2 years out on new clients. It feels like there are high end custom homes going up everywhere along 98 in Mexico Beach and on Cape San Blas. Almost every one of these custom homes is being built for the owner of the lot and is not or will not be for sale. A common misconception is that the homes people see custom builders building will be for sale when done. 

When you combine the costs of building with the timeframe and permitting/regulation headaches that often come with building, it’s pushed the value of anything existing and move in ready higher and higher. Vacant land has gone up as well with properties close to or on the beach that are more scarce seeing the largest increases in values. We haven’t seen vacant land prices eclipse those of 2005. Home sales prices on the other hand are at all time record highs in 2021 for our coastal markets. 

The average price of a single family home on North Cape San Blas in 2021 is $1,078,710 at the time this newsletter was prepared. For comparison, Mexico Beach is $428,873 and the City of Port St. Joe is $305,819. The North Cape market is arguably the hottest in the area and has been very popular along with Mexico Beach for those escaping the crowds of the Panama City Beach/C-30/Destin areas. The Mexico Beach average price is lower than it would be if more of the owners closer to the beach wanted to sell, but there hasn’t been one beachfront single family home on the market since Michael, and there was only one beachside single family that has come for sale in all of 2021. We sit around and wonder what a nice beachfront home really is worth. Everyone has to guess as it’s been 3 plus years since one has been for sale in Mexico Beach.

How is 98 Real Estate doing? It’s felt like a weird year and we’ve had countless buyers that have grown frustrated at the lack of available properties. It’s been so bad we’ve had walk-ins think we are lying and not telling them about everything for sale. It’s the first year I’ve had what seemed like reasonable buyers that are qualified/often cash buyers, and we’ve yet to be able to get them a home. Those looking closer to the beach have had a few that were acceptable, but we’ve lost in bidding wars with cash offers over asking price with no contingencies. The flip side is that it’s been a great year for sellers, and we’ve sold pretty much everything that we’ve listed if it’s been priced near any actual sales. It’s not as crazy as it was this summer, but market priced inventory is still moving relatively quickly. We are $19 million ahead of our closest competitor in the Mexico Beach to WindMark Market, 2021 will be our 9th year in a row as the number one brokerage for the area if we stay in 1st place. We’ve got 22 agents now and are already having by far our best year ever with over $80 Million in closed sales. I’m personally at my best year with almost $30 Million successfully closed. We’ve got an agent that can help with whatever you’re wanting to buy or sell in Mexico Beach or Gulf County. 

Below are links to what is currently for sale:
Mexico Beach to WindMark Beach
Port St. Joe
Cape San Blas to Indian Pass

Here is everything that has sold in the last 180 days

I used to end newsletters with my projections with what I thought the market would do in the future. I am scared to do so after being so wrong on Covid and seeing how it actually boosted the market instead of hurting it as I and many predicted last Spring. Rental rates are high for owners, interest rates are low, cash buyers are abundant, and more and more people want to be a part of this area. It’s hard to see the market slowing down, but I openly admit my crystal ball is broken and try and give customers the facts the best that I can so they can make their own informed decisions on buying and selling. 

Personally, life is great. Ollie is 14 months and Hudson is in Pre-K and keeping us on our toes at all times. Michelle and I really enjoy our small town atmosphere and raising our kids here. 


Zach Childs 
Broker/Owner- 98 Real Estate Group
#1 Producing Real Estate Company Located in Mexico Beach-2013, 2014, 2015, 2016, 2017, 2018, & 2019
[email protected]